The markets are still in corrective modes and the declining 5 DMAs tell us it is best to tread lightly until the buyers can regain the upper hand. There is no reason to believe the markets have topped out, but we never know how far a correction will go or how long it will last. The correct role of traders is to be patient with the overall averages (or be selectively short with tight stops) as the selling runs its course and to identify the lower risk stock ideas where the momentum is turning higher. That is what the focus of Alphatrends Premium service.
$SPY needs to reclaim the declining 5 DMA and break the pattern of lower highs and lower lows from the last week before new index longs can be trusted.
$QQQ the prior band of support between 6990-7010 acted as resistance this morning and that level takes on further significance as resistance with the declining 5DMA (red) also in that area.
$IWM prior resistance near 6450 is actiong as support and breaking that level would likely lead to a move down towards 8400. It will take a move back abov e8600 for buyers to regain control.
$SMH semiconductors remain the most troubling area of the market as the prior support acted as resistance this morning, continued weakness here could lead to an erosion in confidence and bring about further selling in the other averages.